Tuesday, February 23, 2010

Cartoon Of The Day: Crowding Out

My 6 year old computer finally expired. So I spent the whole day yesterday with my children looking for an alternative.

Now, I'm having a difficult time adjusting to this new substitute.

Worst, my chart programs can't even seem to run. So the familiarization process could affect my posting.

Anyway, my test post will begin with this great caricature on what is known as the "crowding out effect." (reference: Cafe Hayek)

It's basically about government versus private spending.



As Murray N. Rothbard explains, ``The annual government deficit, plus the annual interest payment that keeps rising as the total debt accumulates, increasingly channels scarce and precious private savings into wasteful government boondoggles, which "crowd out" productive investments."

This shouldn't be seen as only a US phenomenon but universally applicable.

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